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Comparing Deep Loss and Shallow Loss programs
There is a lot of talk about the 2012 Farm Bill and concerns if it will actually be completed this year. As different programs are put forth before the House and Senate Ag committees the terms deep loss and shallow loss are terms that surface in those debates.
American Farm Bureau Economist Matt Erickson explains how a deep loss program works. “It’s a program that is going to help farmers and ranchers survive large systemic losses and be there at a time when they absolutely need it.“ For example he says, “If a farmer experiences a drought, that is a time when the government can intervene and be there for you – as a guiding hand.”
Erickson tells Brownfield the two programs can be illustrated with a $1 bill. “Think to yourself – this is the budget reality in Washington, DC.” He says look at the dollar and say “How can I best use that dollar?” He says the questions farmers should ask themselves are, “Do I want a shallow loss program where the government is going to kick in during a minimal loss?” or “Would I rather have the government only intervene when there is a large systemic loss?”
With just over 60 days left on the Congressional calendar and 2012 being an election year, Erickson says getting any farm bill done this year will be a challenge.
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